Klarna plans to operate with half its staff as AI boosts productivity

It plans to further reduce its workforce to around 2,000 employees in the coming years. Siemiatkowski said the company can “do a lot more with less” using AI.

In May, Siemiatkowski wrote in a post on X that the company saved millions by “spending less on photographers, image banks and marketing agencies.”

He added that the marketing team was more productive, working at half the size of the previous year.

Last year, Klarna stopped hiring for most positions outside of its engineering team as it increasingly relied on AI technology to fill the gaps left by departing staff.

In a February blog post, the company claimed that its AI assistant could handle the workload of 700 full-time employees. Klarna said the chatbot outperformed human agents in terms of “commission resolution” accuracy and equaled human employees in terms of customer satisfaction levels.

Klarna also projected that this technology could increase the company’s profits by $40 million this year.

Meanwhile, Klarna competitor Affirm is also doubling down on its AI chatbots – but is not publicly looking to cut staff.

“No one has to lose their job yet to be replaced by a robot at Affirm, so this is not a short-term cost savings,” CEO Max Levchin said on an earnings call in May, adding that AI could save the company money in the next three years.

AI shakes up the technical staff

Other tech companies are shedding staff as they shift to AI-centric businesses.

Earlier this month, Dell announced significant restructuring of its sales division, which led to mass layoffs.

Tech companies including Google and Apple have laid off more than 350,000 workers since the start of 2023, according to data from online tracker Layoffs.fyi. While many of these layoffs have been attributed to overemployment during the pandemic, the need to reallocate capital to AI investments is also a significant driver of the layoffs.

Meta CEO Mark Zuckerberg said in a February earnings call that the layoffs were necessary to invest in “ambitious long-term visions around artificial intelligence.”

Google CEO Sundar Pichai also wrote in a memo in January that job cuts were needed to “create the capacity to invest” in AI.

Klarna credited AI with improving its financial performance, with net losses falling from 854 million Swedish kroner, around $84 million, in the second quarter of 2023 to 10 million kroner, around 900,000 dollars in the most recent quarter.

The company also reported a 27% increase in revenue and a 73% increase in revenue per employee over 12 months.

Klarna is preparing for an initial public offering as early as next year, although Siemiatkowski told the FT that the company has not made any IPO decisions yet.

Klarna did not respond to a request for comment from BI sent outside standard business hours.